The 20th sanctions package brought forward by the European Commission proposes a complete ban on all cryptocurrency transactions related to Russia. This step aims to limit the financial infrastructure in a general way, unlike the targeted sanctions applied so far. The new draft aims to increase the costs of sanctions evasion, with the European Union tightening its grip on key points that control crypto transactions.
Changing Trends in Crypto Investments
Between 2024 and 2025, crypto flows between sanctioned addresses and centralized exchanges dropped by 30 percent. In the same period, there was an increase of over 200 percent in transactions that do not require any identity verification and are directed to decentralized platforms. It is noteworthy that Russia has shifted its activities to different areas, especially in the use of crypto for international trade and sanctions avoidance. Although access to centralized exchanges and regulated platforms is decreasing, transaction volumes to Russia are increasing on Telegram-based services and offshore platforms.
Current Restrictions and Changes Brought by New Prohibitions
The European Union has already banned the provision of cryptocurrency wallets, accounts and custody services to Russian citizens and institutions. In the previous sanctions package, transactions regarding the Russia-linked stablecoin named A7A5 were also blocked. According to Chainalysis data, A7A5 reached a transaction volume of $93.3 billion in one year. In addition, sanctions are also imposed on platforms such as Moscow-based Garantex and Russia-related infrastructures such as the A7 network.
With the newly proposed ban, not only storage services; Crypto service providers operating within or affiliated with the EU are also wanted to be prevented from carrying out any transactions related to Russia. The draft text makes clear that third-country intermediaries can also be targeted.
Three Basic Layers of Sanctions Evasion
Sanction evasion in the crypto space generally occurs through identity, jurisdiction and financial instruments. Really effective trafficking is carried out through non-EU service providers, over-the-counter offices and intermediaries operating via Telegram. The use of stablecoins is one of the prominent methods. According to Chainalysis, 84 percent of illegal crypto transactions occur via stablecoins, and this rate is increasing.
Developed by Russia, A7A5 is a tool to continue international payments without being dependent on Western financial infrastructure. However, in cases such as Garantex, which was sanctioned and blocked by the USA in 2022, the effect of the regulatory intervention remains short-lived, while the activities are quickly moved to other channels.
Stablecoin Issuers and Third Country Pressure
The success of the new bans will largely depend on keeping in check the on-off ramp points at which stablecoins can be converted into fiat currencies. If issuers such as Tether and Circle comply with EU sanctions and freeze transactions of Russian-linked addresses, the cost of smuggling could increase significantly. In the case of Garantex, relevant services were quickly suspended following Tether’s wallet closure.
However, as long as third-country intermediaries are not blocked, Russia-related transactions can continue through other platforms. Since the EU does not have direct enforcement power over actors outside its jurisdiction, it is forced to resort to secondary sanctions and market access restrictions. It is critical for the effectiveness of controls that crypto asset service providers regulated in the EU act meticulously regarding sanctions.
The extent of the impact the bill will bring depends on the scope of the legal text and the cooperation of stablecoin issuers. In addition, it is evaluated that ongoing flows through platforms operating in countries such as Türkiye, the UAE and Central Asia can greatly reduce the impact of the restrictions.
